Market Analysis

Now, the trigger of sub-prime loan has caused not just the credit crunch, but a national – and now an international – recession.

 

And all because egalitarianism demanded that people unqualified for loans be given loans, anyway.

 

If the recession becomes full-blown, that will exacerbate the housing problem, just as it was and is recovering. Last September the sales of homes in San Diego were 56% higher than September, 2007.

 

Given that, the housing market was well on its way to recovery, and indeed may still be, but the housing market needs the same ingredient  as ALL markets, and that is CONFIDENCE.

 

As the stock market is demonstrating, daily, there is a real lack of confidence in the general economy, but there are signs a lot closer than the stock market.

 

In my neighborhood, the demographics and psychographics are showing “signs.” Most of my neighborhood are retired, and they are sanguine about the economy, but the self-employed are showing some raggedness in confidence.

 

When the market goes south, the first thing that goes with it are self-employed housekeepers, painters, and carpet cleaners. Other self-employed, such as electricians and plumbers are more secure – when you need them, you will find the money.

 

But those homes where families own painting and carpet cleaning businesses are going up for sale — not short-sales and foreclosures — just precautionary sales. In other areas, real estate agent’s homes are listed, but in my neighborhood most of the agents are securely retired.

 

Unless we can generate some CONFIDENCE, that trend will continue.

 

Obviously, people make money in rising markets, and some make money in falling markets. The investors are making money today in the falling market housing by buying homes they can rent at the price of their mortgage payments, but few people have the finances for such high value investments.

 

Most people with discretionary income are simply awaiting the usual Christmas sales, which will come early and with even greater discounts. Those people will buy the products they had intended to buy anyway, for less money.

 

That helps the economy. It needs it. But housekeepers, carpet cleaners, and house painters will remain endangered because we can do without them as an economy — just not in my home.

 

My wife of 51 years would get rid of me before getting rid of our housekeeper!

 

Everyone has their priorities.

Advertisements

Bet You Didn’t Know

That well-known local watercolorist Pam Brasel teaches a local class in watercolors.

 

 

October 23 MLS Update

Eleven homes came on the market in the Zip Code, but none in The Meadows.

 

There were 13 price changes in the Zip Code but only one in The Meadows, a home on Oak Spur in The Glens, 2,600 s.f. and built in 2004, has been reduced from $425,000 to $399,000.

 

Nothing else happened in The Meadows, but four homes in the Zip Code went into Pending, and three closed escrow. The HIGHEST price of those that went into Pending, or closed escrow, was $363,000 – continuing the sale of only investment-class properties.